Episode 16: What is Consistent Adaptation & How Does it Apply to You?

ABOUT THIS EPISODE

On this episode of the Build Your Life Podcast with Financial Expert John Browning, we're discussing something called Consistent Adaptation.

Listen in as John breaks down a seemingly complicated concept into terms and examples that you can clearly understand. He also explains how being resistant to change can limit your asset growth in the future. Learn all about this an much more on today's episode. 

For more information, visit www.GuardianRockWealth.com to learn more about what John can do for you.

  

Welcome to the building your life podcast with John Browning. Building your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth in Lake Forest, Illinois. He's also the author of the Book Build Your Life, not a portfolio, a guide to your financial future based on your personal values. Now you can purchase John's book on Amazon, or you can stay around to the end of today show and I'll tell you how to get a free copy milk right to your door. I'm Michael Lawn, your host for the next few minutes as we chat with financial expert, business owner and author John Brown and good afternoon John. How are you today, sir? I'm doing well about stuff, you know, I couldn't be better. Things are great as a Beautiful Day and Little Rock and there's a lot of life. How's the weather? Are you still in Hawaii? I am here for good, I think so. We have our permanent, Permanent House that we're staying in in place called St Louis Heights, and it's right...

...outside of Honolulu. I've got in my office set up in downtown Hollolulu, which I can't get into yet, but I was in there for a few weeks and then they said, yeah, I don't come here anymore. So okay, and do you have guest quarter so that when I come over I'll have a place to stay? Maybe? HMM, absolutely. Yeah, we got mixed Beteros over and get you awesome some. So when the airlines open up, bring my wife over. We didn't get a great chance to celebrate our thirty anniversary because of the COVID thing. So she's always wanted to come back to Hawaii. Went as a kid. I've never been there, so I might take you up on it. All right, so love it. Yeah, well, that's not why we're here today to talk about Hawaii vacation. For me, we are here to talk about finance and and coming out of your book build a life and not a portfolio, which is an Amazon best selling book, by the way. Congratulations on that. Thank you. But we want to talk today about the what you call consistent adaptation and,...

...as you normally do, John, you use a word that I'm not really sure or a phrase that I'm not really sure what it is. So I'm going to ask you the question that some of our listeners may be asking is like, what is consistent adaptation. A good question and one that I get asked occasionally. You know, people sort of I thinking of what it means when I'm not sure and I just take it back to what in life is guaranteed, and we often hear well, death and taxes, right, yeah, and so. But even taxes change almost every year. Yeah, but they're going to be there, right, so you know that they're. So it is kind of like it's pretty much a guaranteed thing. They're they're going to have taxes, and with all the money that they're pumping into the system right now, I have a feeling those could be going to the upside here in the next several years, but for now, no, yeah, that's an interesting point that we might talk about on an upcoming episode, because everybody loves free money from the government, but we don't we don't always think about...

...the downs you know that the downstream effect of all that free money. Somebody's got to pay for that. So that would be a very interesting conversation to have. And it's speculative, right, we don't know, but odds are but the odds are and there are some things you can look at in history. Right. Well, yeah, there are odds. But the other reason I want to talk about that is what can people do now to start planning for that? Because if Texas go up, that means I've got less revenue coming into my my family. I need to think, really start thinking and finding about that. So maybe we'll do an episode about that coming up. Yeah, let's do that, because you're absolutely correct. It's got to be planned for. Okay, let's get back to consistent adaptations. Sorry about that's right, that was a question. Right, and and, but it's a good lead in because as we think about things that are likely to come down the path in the future, that's what consistent adaptation is all about. So, if changes constant, why would you continue to invest in the same way...

...that you have for the past several decades? Right, and the answer to that, I think, is you wouldn't, or at least you shouldn't. And so, as the marketplace changes and as we experience varying degrees of globalization and natural disasters, pandemics, politicians continue to push their own agendas and that impacts and changes the marketplace. So as the world changes around you, if you don't adapt, you're going to be left behind and you're going to be left investing or putting your portfolio and building your life in a way that's inefficient and doesn't work as well as you think that that it should. And I'm always fascinated because I think as humans were resistant to change. But yet that's cheer right, going to happen, and it does happen. And why not...

...be just make it part of your consistency to adapt as you see things changing. Okay, so when talking about consistent adaptation, so consistently changing, what how do you do that for your clients? Okay, so I go back to my life. You know what? Twenty years ago we were in some big company, Mutual Find Company, and we would rebalance our portfolio every year or so. That's kind of what you're talking about, but I it feels to me like you're thinking about doing it more often than once a year. We shauge us as often as once a quarter, but you don't want to do it too much as well. But that's just part of that consistent adaptation. You know. That's the I'll call that the the easy part. The harder part in the the more more difficult it is is when things like a pandemic happened. Since we're in one. We'll talk about that. Right. That's just one of many things that happen in any given year, month,...

...decade, whatever. But just does one example, I think I've used this before on the podcast, is you have many folks, I mean like I, started in the business thirty years ago and the idea of a forty portfolio, which is where sixty percent of your portfolio is in Equity Securities and forty percent is and fixed income, and that generally would protect you on the downside. Right. Well, three decades have passed since that was a great idea. I'm not seeing everybody go out and and sell your bonds. That's not the point. Bond still play very important part and most investors portfolios, but they're not going to protect you in the same way that they did ten, fifteen, twenty, thirty years ago. They're going to play a different role for you. If nothing else, we just saw the to your treasury price in negative interest rates and I think that's likely to happen going forward. So suddenly your fixed income is fixed negative income if that happens, right, so that's certainly going to you need to adapt to that. Interesting. Okay,...

...so it's more than just my annual rebalancing act. It's really understanding the whole portfolio and going back to your whole concept of building a life, not a portfolio. Is You've got it. You've got your life that you're going after and you're helping me achieve that, that ultimate goal, and you're in the background and working with me, obviously, to do all of this adaptation. But it's a mindset that your client has to bring to the table right right, just as they need to understand it. You know, the the reason that they call me and they asked me to come in and take a look is because this is what I do every day. So I'm always thinking about these things and it comes to the second nature to me. But they need to have a general understanding and what I'm doing so that they have a good experience when they when they look at their statements and they have a good understanding. Yeah, that's good. That because, yeah, yeah, nothing worse than looking at your statement going what is he doing? And that would be bad. So it's consistent adaptations, some mindset. You've talked about why it's...

...important because you know, things do change and you've got to have a portfolio. That's, may I say, it's Nimble enough to make those changes when needed. And what are some of the first steps? How do we get started down that road of, I guess, consistent adaptation in a portfolio? What are some of the first steps that you that you do when you talk with some I well, in addition to course, that quarterly rebalancing, which just is so almost a mathematical, quantitative type of thing, is you know, we ask questions about, well, what is happening now, and then, of course, the more important question, why is it happening? Why is it happening now? Is it likely to persist in the future? What other businesses or industries or sectors of the market it might be impacted, either positively or negatively going forward based on what's happening now and why it's happening? And then should I react or should I not react? And that's a really...

...important question, because when you start thinking this way, you think you should react to everything, and that's generally not the case and and certainly not what I call knee jerk reactions, or you know the Dr Knocks on your knee and your your foot boat was lying. You know that you never know if it's going to kick him or not funny how they learned to set step to the side pretty pretty quick. But you don't always react, but you need to be aware of it and sometimes what can be I call it fun because I'm a bit of a nerd with this, is, as things happen to change and we adapt, you can actually pick up different pieces of the puzzle, put them together and form something that wasn't even there before. So you may have a portfolio or a portion your portfolio that wouldn't have even been possible to have several years back, and now it is quite possible, and that's my job to keep track of all that and explaining that to my clients fascinating,...

...because those are but but again, that's the value of working with financial expert like yourself, is that you can understand these pieces and parts and and connect the dots between three different things that, oh, because of what's going on, these three now fit together nicely in your portfolio to help you achieve what we're going after. Right, that's right, Yep, that's my job and it's really interesting. The the fight or fleas is what came to me. I don't know that's the right word, but whether you you sell or not, making those decisions and you talked about how one thing can impact other sectors. Right. So we look at business a lot, or I do, and then somebody said the other day about how oil prices had gone down and how something else was over here doing crazy but this over here was really up, and I thought, you know, I'm sitting on her on. How do you keep track of all this stuff? But that's what you do, is you keep track of it all. Yeah, you know, it's really interesting and you can learn a lot throughout history of how businesses made made...

...significant, significant amounts of money, and it's not always what you would expect. For instance, when the telephone was the telegraph was first invented, right, well, you would think I want to invest in telephones or or something along those lines, right, or something that had to do with communication, and it would have been right, you would have been okay. But what was really interesting is what if you would have invested in the manufacturer that made the cables? Oh Wow, they actually ended up making more money than the people who were, you know, invented the actual telephone and telegraph machine. And the same thing you know throughout history, the rockefellers, you know the you know they they of course made a lot of other money in oil, but then they figured out, Hey, you know what, if we actually got into the manufacturing of the barrels for this oil and the metal bands that went around those barrels, you make even more money. And so that's what they did. And and you can just there's a lot of stories that go...

...back to that seam idea. If you want a modern day example, the idea of Bitcoin. Right there's a lot of people that are like, Oh, I gotta Buy Bitcoins. That's the newest, latest, greatest, shiniest thing. And yet if you really look at it, it's not. The bitcoin bitcoins very volatile and it's not really appropriate for very many investors. All right, it's something that we don't really get involved in with any of our clients, but the technology behind bitcoin is is really what is is where the economic opportunity is, because it's much bigger than bitcoin. It's actually going to power big banking industry. Is like the pink to me or can and it's all sorts of things like that. So it's much bigger than just bitcoin, which is the thing you hear so much about. Yeah, and and hins another reason to work with John is he sees all those things behind the scenes,...

...where I would just be looking at bitcoining on. Yeah, whatever, but you're going to say, Michael, what about this and this and this, and how does these things, maybe one of these, fit into your portfolio to help you achieve that life that you're after, which is really interest. I never thought about the barrels of oil and but yeah, I'm all that. Oil is great, but it doesn't restored somewhere. So looking beyond the surface, I guess, is what I would say. Is What one thing that you're really, really good at and by people should reach out to you and just have conversations, and that's the thing that the other thing that I love is you just love have conversations with people. So tell us again how somebody they're listening to this and their intrigue. What's the easiest way for them to get Ahold of you, John? The easiest ways just to give us a call. It's three one, two, three, seven, two five thousand is our as our main line, and one of us will pick that up and we'll talk to you or we'll get back to you with answers to your questions as best we can, and we love to talk to you. But you can also find us online. FACEBOOK linkedin. Guardian Rock wealthcom...

...also works and you can. There's an about us section and all sorts of free material that you can look at and and get some education on. There's flipbooks, there's videos, there's all sorts of things out there for you to for you to use. That's great. So that and that's a great way to for somebody to take simple steps ticket to know you, like you and trust you is go to your website, Guardian Rock Wealthcom, look you up on facebook Linkedin, but really just, you know, cut through the bears, reach out to John Column, email them and all that informations on his website. You can actually ask him for a copy of his book as well. But get get to know John and talk about how to build a portfolio that really is there to support your life, because that's really what he's interested in doing and helping you do that. And part of that is that consistent adaptation where you're constantly changing to keep up with all the changes in the world. So, John, thanks for another great e episode and helping me understand...

...yet another one of those fancy phrases that you use. Buddy, thanks a lot, of let's last week all right, we'll look forward to a body. Take care all right the night. So thanks for listening to the building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it is released. Have a terrific day.

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